Deltek's acquisition of Input creates a powerful source of critical information for contractors.
After Input Inc. endured months with a for-sale sign out and a couple weeks of intense rumors about who would buy it, the acquisition of the market research firm came to a close Oct. 1.
Deltek Inc. paid $60 million for Input in an all-cash deal, besting other suitors that included private equity firms and other strategic buyers.
The company’s goal is to meld Input’s contract data and market analysis with Deltek’s software, such as its customer relationship management offerings and its GovWin network for teaming and managing subcontractors.
“We can cover the entire life cycle of a project and what it means to be a government contractor,” Parker said. “How do I find business, how do I close it, how do I deliver it, how do I account for it and report it. To us, it is a unique capability to bring together.”
For Input’s 200 employees, Deltek’s purchase must have come as some sort of relief.
“I think everyone is pretty excited,” said Kevin Plexico, Input’s senior vice president of research and analysis services. “Of all the [potential buyers] we talked to, this is one we know very well and didn’t leave the employees scratching their heads.”
The acquisition of Input is part of Deltek’s strategy to move the company beyond its traditional back-office accounting offerings. The Input deal is the eighth acquisition in five years, said Kevin Parker, president and CEO of Deltek.
“Over the last five years, we’ve expanded to more program and project management and business development capabilities,” Parker said.
The Input deal dovetails with Deltek’s acquisition of mySBX, an online network for building and managing partners, which the company bought in December 2009, Parker said.
Deltek can now offer software and services for information related to market intelligence, business development, collaboration, project management and financial management.
Deltek plans to invest and expand Input’s research and analysis capabilities, and Deltek will be looking to broaden Input’s reach into other markets that Deltek serves, particularly the architecture and engineering industry in which the company provides project management software and other products to 9,000 customers, Parker said. The company also is interested in expanding into the state and local market and other government vertical markets.
“We recognize that they have very unique capabilities, so how can we invest in them to accelerate their growth?” Parker asked.
The combination of Deltek’s software, such as its customer relationship management offerings, and Input’s content should be very powerful in the market, Plexico said. “We always thought that, and now we have the opportunity to prove it in the market.”
The combination makes good business sense, said Scott Lewis, a former Input executive and former publisher of Washington Technology and Government Computer News. Lewis is president of PS Partners, a consulting firm that helps vendors connect with systems integrators.
“They already were working a lot together, allowing their users to port Input’s data into their Deltek products," he said. "So bringing them together makes sense.”
The combination of the two also prepares Deltek and Input for the entrance of Bloomberg and its BGov data offering into the government market, said Mark Amtower, founder of Amtower & Co. consulting company. Bloomberg is one of the companies rumored to have been interested in acquiring Input.
The challenge, Amtower and Lewis agreed, is how to integrate the two companies and how they will sell their portfolio of products.
“You really have to be careful how you put the package together, whether it is a turnkey or selling the pieces,” Lewis said.
The danger is that sales support for smaller or more niche products can fall off, damaging the growth of those products, he said.
“Whether you are selling end-to-end or piece-by-piece, customer service is absolutely critical,” Amtower said.
Deltek plans to grow Input's products and move into new markets, Parker said.
The company had Input in mind in when it acquired mySBX in December 2009, Parker said. “MySBX was a good acquisition, but we were always thinking how can we bring these two together,” he added.
Now known as GovWin, mySBX came on board with about 10,000 members who used the network to look for and collaborate with partners on government contracts. It now has 15,000 members and is expected to grow to 20,000 to 25,000 by the end of the year, Parker said.
Parts of Input might migrate to GovWin, and parts of GovWin will shift to Input, but both will remain distinct business units, he said.
Input’s management team of Kevin Plexico, Brian Haney, Mary Beth Cockerham and Kevin Gates will make the transition to Deltek. Parker said Input founder Peter Cunningham will not have an operational role in the company but will be an adviser to Parker.
Deltek is looking at several areas in which its own capabilities and Input’s can be combined for new offerings.
That includes expanding Input’s research capabilities, creating a tool to help companies identify and manage organizational conflicts of interest, and developing tools for managing subcontractors, Parker said.
“This is something we’ve thought about for a very long time,” he said. “I’m convinced that after the first 90 days, we’ll look back and see that Deltek and Input have done something together that neither of them could have easily done on their own.”
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